In This Article:
Global Dominion Access SA (BME:DOM), is a €826m small-cap, which operates in the IT services industry based in Spain. Whether it’s the next big thing in tech or an alliance with a partner in another industry, tech companies have plenty of opportunities for their companies to thrive. However, more specifically in the IT service industry, tech analysts are forecasting a highly optimistic growth of 30% in the upcoming year , and a massive growth of 68% over the next couple of years. This rate is larger than the growth rate of the ES stock market as a whole. Below, I will examine the sector growth prospects, and also determine whether Global Dominion Access is a laggard or leader relative to its tech sector peers.
See our latest analysis for Global Dominion Access
What’s the catalyst for Global Dominion Access’s sector growth?
Many tech businesses are pursing growth through various strategies including new M&A, collaboration and alliances, as well as organic growth. In the previous year, the industry saw growth in the teens, beating the ES market growth of 11%. Global Dominion Access leads the pack with its impressive earnings growth of 21% over the past year. Furthermore, analysts are expecting this trend of above-industry growth to continue, with Global Dominion Access poised to deliver a 37% growth over the next couple of years compared to the industry’s 30%. This growth may make Global Dominion Access a more expensive stock relative to its peers.
Is Global Dominion Access and the sector relatively cheap?
IT services companies are typically trading at a PE of 28.81x, above the broader ES stock market PE of 18.59x. This illustrates a somewhat overpriced sector compared to the rest of the market. However, the industry did return a higher 18% compared to the market’s 12%, which may be indicative of past tailwinds. On the stock-level, Global Dominion Access is trading at a PE ratio of 28.81x, which is relatively in-line with the average IT services stock. In terms of returns, Global Dominion Access generated 9.6% in the past year, which is 8.6% below the IT services sector.
Next Steps:
Global Dominion Access’s industry-beating future is a positive for shareholders, indicating they’ve backed a fast-growing horse. However, this high growth prospect is most likely factored into the share price, given the stock is trading in-line with its peers. If Global Dominion Access has been on your watchlist for a while, now may be the time to enter into the stock. If you like its growth prospects, you’ll be paying a fair value for the company. However, if you’re hoping to gain from an undervalued mispricing, this is probably not the best time. However, before you make a decision on the stock, I suggest you look at Global Dominion Access’s fundamentals in order to build a holistic investment thesis.